Demand for rare earth magnets is on the rise as they are critical to a wide range of industries, including defense, automotive, aviation, AI, robotics, among others. With the global push toward electrification and clean energy, rare earths have gained critical importance. This has reignited investor interest in rare earth stocks, particularly amid escalating U.S.-China trade tensions.

Riding on this, rare earth stocks have been delivering solid price performance so far this year. An earnings beat in their upcoming releases could provide further momentum. In this context, we have handpicked two rare earth companies — MP Materials Corp. (MP Quick QuoteMP - Free Report) and USA Rare Earth, Inc. (USAR Quick QuoteUSAR - Free Report) , which appear well-poised to beat estimates this earnings season.

Rare Earth Stocks Riding on Solid Demand

Rare earths are a group of 17 metallic elements and are categorized into Light Rare Earths and Heavy Rare Earths. They can be instrumental in technologies looking to lower emissions and energy consumption, as well as improve efficiency, performance and thermal stability. However, they are not often found in concentration, so it is not always viable and cost-effective to mine, adding to their strategic importance. 

China currently commands 70% of global rare earth mining and 90% of processing capacity. To counter this dominance, focus has intensified on building supply chains that are independent of China. 

The U.S government is making direct investments in companies (MP Materials being one of them) to boost domestic production. Recently, the United States and Australia signed a landmark Critical Minerals Framework, both committing to invest more than $3 billion in critical mineral projects in the next six months. These initiatives mark solid steps toward establishing a more resilient, China-independent supply chain but meaningful progress will take time.

Neodymium and praseodymium (“NdPr“) prices remained elevated in the third quarter, supported by strong demand and supply concerns. MP Materials’ decision to halt its shipments to China provided a significant boost to prices. The U.S government also offered price support at $110 per kilogram to secure production at home.

How to Pick Earnings Estimates Beating Stocks?

Identifying stocks that are poised to beat on earnings in their upcoming releases might seem a daunting task. However, our proprietary Zacks methodology makes it fairly simple. 

One can pick stocks, which have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Our research shows that for stocks with this combination, the chance of an earnings surprise is as much as 70%.

Earnings ESP is our proprietary methodology for determining stocks that have the best chances to surprise with their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

2 Potential Outperformers This Season

MP Materials has an Earnings ESP of +8.77% and a Zacks Rank of 3 at present. It is scheduled to release third-quarter 2025 results on Nov. 6. 

The Zacks Consensus Estimate for MP Material’s third-quarter earnings is pegged at a loss of 14 cents per share, indicating a wider loss than the loss of 12 cents reported in the year-ago quarter. The estimate has moved up 6.67% over the past 60 days. The company has an average negative earnings surprise of 1.39% in the trailing four quarters.

MP Materials Corp. Price and EPS Surprise

MP Materials Corp. price-eps-surprise | MP Materials Corp. Quote

MP Materials has been reporting solid gains in NdPr production volumes, reflecting process optimization and the progress of its ramp-up initiatives. Rare earth oxide (REO) production has also been strong, supported by higher recoveries driven by ongoing Upstream 60K optimizations. But with most of the REO output now being channeled toward producing separated rare earth products rather than being sold as concentrate, it is likely to have reduced sales volumes. The Materials segment’s third-quarter revenues are expected to reflect higher NDPr sales and prices, offset by lower REO sales. The Magnetics segment’s ramp-up of commercial metal deliveries is expected to have added to revenues in the quarter.

The shift toward separated products has increased MP Materials’ production costs, as these are more expensive to produce compared with rare earth concentrates. Selling, general and administrative (SG&A) expenses have also climbed due to the expansion of its workforce. These cost pressures have likely led to a loss in the quarter. 

USA Rare Earth has an Earnings ESP of +81.82% and a Zacks Rank of 3 at present. It is also scheduled to release third-quarter 2025 results on Nov. 6.

The company posted an earnings surprise of 38.5% in the last reported quarter.  

USA Rare Earth Inc. Price and EPS Surprise

USA Rare Earth Inc. price-eps-surprise | USA Rare Earth Inc. Quote

The Zacks Consensus Estimate for USAR’s third-quarter earnings is pegged at a loss of six cents per share. The estimate has moved up 40% over the past 60 days. 

USA Rare Earth is developing a rare earth sintered neo magnet (NdFeB) manufacturing plant in Stillwater, OK, which is expected to start production in early 2026. It also holds certain mining rights to the Round Top Mountain deposit near Sierra Blanca, TX, but has not started mineral extraction. The company thus does not generate any revenues and continues to incur operating losses. The absence of revenues, higher SG&A expenses and an increase in R&D expenses, somewhat offset by higher interest and dividend income due to higher balances in its money market funds, is expected to have led to the loss in the quarter.